Cryptocurrency exchange platform, Binance, will temporarily halt U.S. dollar transfer operations.

KEY POINTS :

Binance announced that it will temporarily halt the withdrawal and deposit of U.S. dollars for its international customers starting from February 8th.
In January, Binance's banking partner, Signature Bank, increased the minimum transaction requirements for dollar transfers.
After announcing the suspension, millions of dollars worth of cryptocurrency flowed out of Binance, however, the company stated that it still maintains a "net-positive" status.

The billionaire and CEO of Binance Holdings Ltd., delivered a speech during a session at the Web Summit held in Lisbon, Portugal, on Wednesday, November 2nd, 2022.

Binance, the world's leading cryptocurrency exchange, has announced that it will temporarily suspend all U.S. dollar deposits and withdrawals, effective February 8th. The reason for this decision has not been specified by the company.

In a statement to CNBC, a spokesperson from Binance stated that only a small percentage (0.01%) of their monthly active users leverage U.S. dollar bank transfers, and that they are working diligently to restore service as soon as possible. Customers who have been affected by this suspension have been notified directly.

It is worth noting that Binance US, a subsidiary of the company that is regulated by the Financial Crimes Enforcement Network of the Treasury Department, will not be affected by this suspension. The suspension only applies to non-U.S. customers who transfer funds to and from bank accounts denominated in U.S. dollars.

The findings from Arkham Intelligence indicate that following the recent announcement, there was a significant increase in the outflow of funds from Binance's cryptocurrency wallets. This was as a result of millions of dollar-pegged stablecoins such as Tether and USDC being transferred to rival exchanges or individual wallets.

According to DefiLlama, Binance experienced a net outflow of over $172 million in U.S. dollars on that day. Although this figure may seem substantial, it represents a small portion of the company's total assets, which are estimated to be worth $42.2 billion by Arkham.

A spokesperson for the company stated that, despite the temporary outflow, they remain net-positive in terms of deposits. The spokesperson also mentioned that outflows tend to increase when prices start to level off following a bullish market trend, such as what was observed last week as some users chose to take profits. As a reference, Bitcoin experienced a rise of more than 38% in January, making it its best month since October 2021.

The Binance exchange token, BNB, remained relatively stable despite recent news, maintaining a value of approximately $328.